Posted on 22 Jun 2022
During the first five months of this year, China's total ferrous scrap imports plunged by 57.1% or 140,584 tonnes on year to reach 105,487 tonnes, according to the latest data released by China's General Administration of Customs (GACC).
The significant on-year decline was largely attributed to the relatively large quantities imported during the same period last year after Beijing had relaxed some import procedures. At that time, Chinese domestic buyers had been more confident about importing scrap, free of concerns about shipping or customs clearance disruptions, so long as their cargoes met the strict standards laid down by the central government and could pass inspections carried out by Customs officers, Mysteel Global noted.
This year during May alone, China imported 29,771 tonnes of scrap, higher by 17% on month though still lower by 74% on year, according to historical GACC data.
"Though we observed a slight increase in scrap imports during May, it didn't mean domestic steelmakers' demand for foreign scrap has improved, as the increase in volume was mostly from alloy steel and stainless scrap, rather than carbon steel scrap," a Shanghai-based market watcher told Mysteel Global.
"The scrap arriving last month had mostly been ordered by Chinese buyers in April when some regions were still under COVID-related lockdowns. These restrictions forced some mills to rein in output and cool their buying interest for imported scrap products," she explained.
Besides the lukewarm demand of domestic mills for imported steel scrap, international steel scrap prices were still hovering high over the past few months, especially in April, which further dampening mills' buying interest, according to her.
For example, by end-April, China's spot transaction price of 6-8mm common-grade carbon steel scrap in Zhangjiagang, in East China's Jiangsu province, was at Yuan 3,370/tonne ($504/t) excluding the 13% VAT, while Japanese prices for HS scrap materials were significantly higher at $600/t CFR at the same time, both according to Mysteel's assessment.
Also in May, Japan remained China's largest overseas ferrous scrap supplier by shipping 23,634 tonnes, accounting for 79.4% of total imports, Mysteel Global calculated based on the GACC data.
Source:Mysteel Global
